UnitedHealth earnings: A peek at things to come

UnitedHealth Group, the nation's largest health insurer, kicks off third-quarter earnings reports for the major carriers. For investors, a big focus this earnings season will be the industry's strategy when it comes to the major government health-care programs, which will make up an increasingly larger share of their business.

"After an eventful few weeks with the release of various data on the public exchanges, Medicare, and Medicaid," wrote Wells Fargo analyst Peter Costa in a research note, "we believe investors will be intently focused on the companies' outlook for 2014, competitive positioning, and growth potential."

UnitedHealth is expected to report third-quarter profit of $1.53 per share on revenue of just over $30 billion, according to analysts' estimates compiled by FactSet.

As the largest provider of Medicare Advantage Plans, analysts will be looking for greater details on its pricing of just-released plans for 2014, and its outlook for profit margins on those plans.

The nation's largest insurer may not be much of a bellwether, however, when it comes to so-called Obamacare. United is offering plans on only a handful of state-built insurance exchanges, including New York and Nevada, where it has made a special push with plans aimed at Latino enrollees.

"Based on our review of the federal exchange prices, UnitedHealth seemed relatively cautious, offering plans in only a very limited selection on the small group federal exchanges with somewhat higher prices," Costa wrote.

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Of the major carriers, Aetna, WellPoint and Humana are the most exposed to the new individual market on the health insurance marketplaces. Aetna is offering plans on 17 exchanges, while WellPoint and Humana are each offering plans on 14.

Aetna's Mark Bertolini offered a punishing assessment of the rocky rollout of the federal exchange on CNBC's "Squawk Box" Monday. "There's so much wrong, you just don't know what's broken until you get a lot more of it fixed," he said.

Wedbush analyst Sarah James is not expecting insurers to offer too much more detail on their outlook for 2014, with open enrollment season just getting underway for both Medicare and Obamacare coverage.

James is also concerned that some Affordable Care Act provisions will make it difficult to calculate earnings for both insurers and investors in the year ahead.

The government has agreed to reimburse insurers under the so-called Three Rs—risk adjustment, reinsurance and risk corridor programs—measures meant to offset potential insurer losses from high-cost subscribers on the exchanges. The trouble is, it's not clear how much they'll receive.